Negotiating the best lease terms is important in commercial real estate. But Juan Alcácer, an associate professor at Harvard Business School’s Strategy unit, explains why businesses also need to understand the strategic implications of expansion in the article Location, Location, Location, which appeared in the Harvard Business School Working Knowledge forum.
Before committing to relocating, businesses need to evaluate the strength of their available resources, Alcácer says. A move will require management to shift its focus from current business activities, which could slow the growth of a successful company. Another common misstep is blindly following competitors. Alcácer cites the example of companies that now regret their move to China.
Businesses also need to be aware of the signals they could be sending to competitors. Through their location selection, businesses might give competitors information about their operations or an opportunity to poach their employees. Businesses can avoid this problem by choosing a niche location, an approach successfully employed by Pixar. Although most major studios are based in the Los Angeles area, Pixar stayed in its Northern California headquarters after being acquired by Disney.
Posts
No comments:
Post a Comment